Widespread adoption of femtosecond lasers for cataract may depend on reimbursements

Vance M. Thompson, MD, had an “Aha!” moment when he saw Steven G. Slade, MD, do femtosecond laser-assisted cataract surgery. “When I saw it in action, I felt like I was witnessing the future,” Dr. Thompson, OSN Refractive Surgery Board Member, said. “I’ve had that happen three times in my career: with the excimer laser, with femtosecond laser flaps and now femtosecond laser cataract surgery. In my 20 years, that’s the third game-changer I’ve witnessed.”

According to John A. Vukich, MD, the accuracy of the femtosecond laser is undisputed for creating corneal incisions, performing capsulorrhexes and facilitating crystalline lens fragmentation.

“The ability to prechop the lens into fragments and facilitate nuclear removal requiring less phaco energy is one of the significant improvements that the femtosecond laser offers,” Dr. Vukich said. “Ultimately it’s going to be performance in the treatment of the lens that will differentiate among the various laser platforms that are out there.”

Early adopters of femtosecond laser-assisted cataract surgery, like Dr. Thompson, have taken on the financial burden of the new technology, incorporating it into their refractive practices and recouping reimbursement where they can. But widespread adoption hinges on widespread reimbursement, according to popular opinion, and that means somehow getting Medicare to pay for therapeutic cataract procedures. 

Clinical improvements

Dr. Thompson received his femtosecond laser in May 2011 and performed his first surgery June 1, 2011.

“In our office, we’re calling this ‘refractive laser-assisted cataract surgery.’ We abbreviate it ReLACS,” Dr. Thompson said. “It is premium cataract surgery, which we define as a premium implant (accommodating, multifocal or toric) along with a laser-assisted cataract surgery approach, intraoperative aberrometry with the WaveTec device for IOL power confirmation, and then if necessary, 3 to 5 months postoperatively, a refractive PRK or LASIK enhancement. The premium implant, the femtosecond laser and the intraoperative aberrometry have really led to a great energy in the refractive cataract side of our practice.”

Despite a $500,000 price tag for the laser system and no promise of widespread reimbursement, Dr. Thompson said he took on the time and expense of femtosecond technology, as well as intraoperative aberrometry and other outcome-enhancing procedures, with the idea that it would translate to better outcomes.

“We don’t specifically charge for the femtosecond laser because it’s just like when we went from metal blades to diamond blades; we weren’t able to pass along a charge to the patient,” Dr. Thompson said.

“Patients do have the option of selecting one of the implant options that may include this technology alongside advanced diagnostics,” Matt Jensen, the administrator for Dr. Thompson’s practice, said.

While the device and click fees are expensive, Mr. Jensen said, “Our philosophy has always been that future growth is tied to understanding advancing technology. And while it is still early in this space, practices that want to continue to differentiate in the future need to look at this technology and how it might alter their program.”

Reimbursement issues

The femtosecond laser helps to enhance cataract surgery. The laser can make much more predictable incisions for astigmatism correction, for example. And consistency of the capsulorrhexis and lens positioning is linked to a tighter distribution of the intended achieved acuity.

Dr. Thompson said that despite adding a second workstation and another step to his surgical workflow, it did not take long to incorporate the femtosecond procedure. The time spent at the femtosecond laser unit is offset by the time previously spent on manual corneal incisions and capsulorrhexes. Lens removal is faster because the lens is already cut into quadrants that need less phaco energy to remove.

“My femto procedures are a little faster than my manual ones,” he said. “But I don’t think there’s any net gain. There’s definitely no net loss, though.”

But for all the advantages in outcomes, the technology is not yet being reimbursed for cataract surgery for Medicare patients.

“There’s a lot of uncertainty regarding how we can make sense out of it financially,” Dr. Vukich said. “Who will pay for it? How this is billed is really a central question.”

In 2005, Medicare ruled that the federal government would allow patients to pay the difference between therapeutic cataract surgery and refractive surgery.

“Up until then,” Mr. Jensen said, “all we read was about how reimbursement was just going to continue to go down, down, down in our lifetime.”

Ophthalmologists may charge patients directly for use of the femtosecond laser in connection with purely refractive procedures, principally when it corrects astigmatism or is for a clear lens extraction, Alan E. Reider, JD, MPH, OSN Regulatory/Legislative Section Editor, said.

But beyond purely refractive procedures, the ability to charge patients for the use of the femtosecond laser in connection with cataract surgery is less clear, Mr. Reider said. Some say femtosecond technology enhances the refractive result, and because refractive procedures can be directly billed, one may charge the patient for all surgeries performed, regardless of what type of IOL is implanted. Others say cataract surgery is a covered service, regardless of what instrument is used, and therefore one may not charge an additional amount.

“And then, of course, there is the lawyer’s answer: It depends,” Mr. Reider said.

Three scenarios

The issue of a covered vs. non-covered procedure can depend on whether the lens implantation is a conventional or premium IOL. Presbyopia- and astigmatism-correcting lenses require resources and services that the surgeon would not otherwise perform for a conventional IOL.

Mr. Reider said the Centers for Medicare a

nd Medicaid Services issued two rulings, 05-01 and 1536-R, that deal with the implantation of presbyopia-correcting IOLs and astigmatism-correcting IOLs. These issuances created a two-aspect rule that premium lenses constituted both a covered and a non-covered procedure.

The beneficiary is responsible for payment of additional charges for resources required for fitting and visual acuity testing of a premium lens that exceed the work and resources furnished for a conventional IOL, Mr. Reider said.

In addition, he noted that femtosecond lasers provide significant benefits regarding centration and tilt.

“Given that fact, the argument would be that it falls within what we call the premium lens policy,” Mr. Reider said. “Under that analysis, you would be able to charge patients when using a laser in connection with those lenses. That’s the theory. Until an official statement is issued, however, we do not know if Medicare agrees with that analysis.”

Mr. Reider speculated about another possibility to address the issue: the creation of a separate code when the femtosecond laser is used in cataract surgery. And if a separate code were developed, there would be at least three different scenarios that Medicare could follow.

First, the code could be non-covered, allowing the patient to be charged.

Second, the code could be bundled into the current cataract procedure code, prohibiting any additional charge to the patient.

Third, Medicare could make payment for use of the laser under a new code. If it became a covered service, it would be subject to the traditional coverage rules, and ophthalmologists would not be able to bill the patient any additional amount.

In all of these cases, the type of IOL implanted would not be relevant.

Mr. Reider said that industry and specialty societies are in discussions in an attempt to obtain clear guidance on the issue. But he could not say when final guidance would be available.

“Obviously, those things take time,” Mr. Reider said.

In January, the American Academy of Ophthalmology and the American Society of Cataract and Refractive Surgery issued a joint guidance statement on billing Medicare beneficiaries when using a femtosecond laser.

In short, the guidance statement said that providers may not balance bill a Medicare patient for any additional fees to perform covered components of cataract surgery with a femtosecond laser.

Medicare Part B permits patients to be billed for additional services used specifically to implant premium refractive IOLs for medically necessary cataracts. The surgeon and the facility may charge the patient only for premium refractive IOLs and the associated incremental professional and technical services, but not for use of the laser, according to the guidance statement.

A refractive lens exchange is not medically necessary and therefore is not covered under Medicare Part B. The surgeon and the facility may bill the patient.

For medically necessary cataract extraction with a premium refractive IOL with no astigmatic keratotomy, neither the surgeon nor the facility should use the differential charge allowed for implantation of a premium refractive IOL to recover all or a portion of the costs of using a femtosecond laser for cataract surgical steps.

But Medicare patients may be charged a fee for performing astigmatic keratotomy. Because astigmatic keratotomy for refractive indications is a non-covered service, a higher fee can be charged for performing it using a femtosecond laser instead of a metal or diamond blade. As with premium IOLs, however, the patient should not be charged an additional amount to concurrently perform the cataract surgical steps with a femtosecond laser, according to the guidance statement.

‘Napkin calculations’

While this debate continues, ophthalmologists in the meantime will have to consider financial models that would allow them to adopt the new technology.

Dr. Vukich used some back-of-the-napkin calculations to estimate how ophthalmologists can afford capital and maintenance costs.

Femtosecond systems cost between $400,000 and $550,000. Dr. Vukich said the standard financing rate for capital acquisition of equipment is about 7% for 60 months, equaling a cost of slightly less than $11,000 per month.

A service fee of about 10% of the purchase price is an industry standard for annual maintenance, to ensure that the optics are up to date and that the equipment is serviced and working properly. The first-year warranty covers this, so year 1 is less expensive. Years 2 through 5 are more expensive, and year 6 is the start of the most profitable period (Table).

In addition, every system will have a per-use fee that ranges from $350 to $450 per eye. The overall procedure fee charged to the patient has to be economically viable, both for the patient as well as the practice. The total cost charged to the patient will vary between practices; however, in building a financial model, Dr. Vukich estimated the amount to be between $850 to $1,500 per eye.

Continuing the rough estimates, in year 1, an ophthalmologist who adopted femtosecond technology would need to do 18 eyes per month in which the patient pays $1,000 extra per eye in order to break even, and 26 eyes per month in years 2 to 5, but only eight eyes per month in year 6 and after.

“In easy figuring, you need to do 18 to 26 eyes a month, at $1,000 an eye, to break even,” Dr. Vukich said. “Anything above this is profit.”

For a cataract center that averages 2,000 to 3,000 procedures a year, an annual growth rate of 3%, and a 15% to 35% adoption rate among patients, the cumulative profit for adopting femtosecond technology ranges from $236,000 to $818,000 over 6 years, Dr. Vukich said.

“In year 6 is when it really starts to become quite a valuable addition to your practice,” he said.

“There is an inescapable reality, which is, there is a cost associated with acquiring, maintaining and using the technology,” Dr. Vukich said. “And the transfer of that cost, the transfer of that responsibility of the cost to the patient, is unavoidable. We as physicians cannot absorb the expense of this new technology into our current fee structure. It has to make sense for everyone involved.”

Future

Dr. Thompson and Mr. Jensen said that they adopted femtosecond technology for cataract surgery knowing that it would not be fully reimbursed. They noted that there has been overwhelming acceptance by patients and referring practitioners, and about 40% of the practice’s patients wind up in one of the programs that includes some kind of femtosecond laser procedure.

“A lot of people say this won’t exist because there’s just not a market, that there’s an end to what patients will pay,” Mr. Jensen said. “And we agree with that. But we just really feel that if you can demonstrate value, they’re right there with you.”

Dr. Thompson said the $500,000 price tag was not a deterrent. He had already spent such amounts numerous times in the past for excimer lasers and femtosecond laser flap-creation systems.

“There’s a little confidence and understanding that if you build it, they will come,” Dr. Thompson said. “That’s where the refractive surgery experience is as helpful as anything in adding something that brings a lot of value to the refractive side of the equation.”

Dr. Thompson said that some day, every practice will have femtosecond lasers.

“It’s taken a decade to get to where 70% of flaps are made with a femto laser in our country, and I don’t know if it’s going to take shorter or longer for femtosecond cataract procedures to reach that point. All I know is that we’re witnessing the future right now,” he said.

“Due to the 2005 and subsequent rulings, there is an ability for patients to pay the difference for non-covered services like they never could before. That certainly has some role in the technologies such as femtosecond laser technology used during cataract surgery, but it may also apply to other future technologies,” Mr. Jensen said. “Who knows where this all goes? All it means is that patients have a vote like they didn’t before.” – by Ryan DuBosar and Cara Hvisdas

For more information:

Is it the right time to incorporate femtosecond cataract surgery into your practice?

Time is now to incorporate femtosecond lasers

There are financial and logistical costs to a physician in adopting femtosecond laser technology for cataract surgery. At this early stage in the game, there is still a nebulous benefit, both to patients and to the physician’s practice. Nevertheless, the technology will continue to improve, and with it, we will see improving outcomes of surgery beyond the marginal improvements that are now being associated with use of the femtosecond laser.

The more exciting opportunity of femtosecond laser-assisted cataract surgery is the technologies that we have not even thought of yet. With time, we will invent lens implants that are not currently feasible because traditional methods of cataract surgery are still imprecise in their opening of the wound and their manipulation of the capsule. And we still have significant limitations in modulating capsule healing after cataract surgery. As we develop better understanding and better control of these factors, no doubt we will have improvements in our outcomes that are an order of magnitude greater than what we are able to achieve now.

Meanwhile, each physician has to decide whether it makes sense in his or her individual practice to adopt femtosecond cataract surgery. For me, it is a no-brainer: Femtosecond cataract surgery is the future. Why not employ it now?

John A. Hovanesian, MD, FACS, is OSN Cataract Surgery Section Editor. Disclosure: Dr. Hovanesian is a consultant to Abbott Medical Optics and Bausch + Lomb.

 

Femtosecond procedures are the future of cataract surgery

Costs are very important, but I think patients have a special trust in laser technology. If it will be proven in the literature that this new technology is really good regarding postoperative quality of vision and safety, then I think a significant part of the public will be willing to pay for it.

Cataract surgery has become quite safe and predictable in recent years. Therefore, payers and patients think that cataract surgery is a simple, straightforward procedure and that they should pay less for it while demanding more quality and better results. I think it has to be evaluated again: What should patients and financiers get for what price? Some patients now are willing to pay for the new technology, but in the long term, the price should decrease.

A small practice cannot afford to finance a femtosecond laser machine and the price of the patient interface. A practice should conduct at least 1,000 to 1,200 cataract operations a year for this to be financially viable. A shared practice is possible, but patients do not like to have the femtosecond laser pretreatment in one place and the cataract procedure somewhere else. Patients expect the whole procedure to be performed by the same ophthalmologist in the same place.

The cost of femtosecond laser-assisted cataract surgery can be as much as $600 higher compared with phaco alone in the U.S. In some practices, it is already incorporated into the final price, and everybody gets the same treatment. In some practices, patients can choose. The latter is the European approach; patients should have a choice as to which technology they want and the price they want to pay.

Postoperative results will be more consistent and predictable with this new technology, and possibly we could approach the exactness of refractive surgery for cataract patients as well. Maybe later we will perform lens surgery at an even earlier age for presbyopia or for refractive problems.

The femtosecond laser is a good technology that will be part of our future in ophthalmology. Every cataract surgeon should consider his or her financial situation before incorporating this because it is an important decision. If the answers are positive, go for this challenging and interesting technology.

Zoltan Z. Nagy, MD, is an OSN Europe Edition Board Member. Disclosure: Dr. Nagy is a consultant to Alcon/LenSx.